The wine club, which meets Fridays, is now fair and balanced with the Beer Club. We are confident that this new office edition will increase productivity, raise morale and ultimately cause us to sign even more partner deals.  That’s the magic of beer.  When asked for comment, BOKU CEO and Chief Beer Taster in Residence (CBTIR) Mark Britto said, “I’m busy.”

• Apps, in-app, and mobile browser purchases
  • Using a mobile browser for e-commerce (using Safari browser on iPhone for purchases on Amazon)
  • Purchasing an app (downloading Angry Birds through the app store)
  • In-app purchases (purchasing the Mighty Eagle while playing Angry Birds)
• Physical world purchases
  • Using a mobile phone at point of sale using NFC tap
• Carrier billing using phone as funding source (Use BOKU to check-out using your phone-number, and charge against your pre- or post-paid mobile phone bill)
• Sending money to a friend using phone (e.g. – a company called M-Pesa in Kenya allows users to send money from family member to family member)

To focus the conversation for purposes of this article, we’ll be focusing on direct carrier billing, which is one of the mobile payments solutions we provide at BOKU.

Cash, debit, credit, or mobile phone number?

When looking at mobile payment transactions, there is a distinction that can be made between where the purchase is made and how. For most consumer goods, the “where” is either a physical brick and mortar store or a website. “How” the charge is made is usually against a credit card, a debit card, or cash / cash equivalent (e.g. – a general purpose reloadable (GPR) card).

With direct carrier billing, the funding source for the transaction does not change – it’s still cash, debit, or credit. “How” the charge is made, however, changes significantly. BOKU charges against a person’s mobile phone bill allowing the consumer’s mobile phone number to become a unique type of payment instrument. This helps to solve a big challenge in the payments space – enabling a population of underserved consumers lacking banking services and card-type payment instruments to participate in online purchases. In addition, BOKU reassures the safety-conscious consumer who prefers not to enter in sensitive billing information such as personal data and payment card details to purchase with peace of mind through a safer 2-step authorization process. And, the simple checkout experience makes charging to a carrier phone bill more convenient than other methods, appealing to many people as the best option for checking out quickly.

The future mobile consumer experience encompasses many mobile payment methods. Using a mobile number to transact and charging to a carrier bill is a profound shift in the purchasing experience and taps into a tremendous market opportunity that is unreachable through many of the current payment methods. Though there are limitations in “where” this type of mobile payments can take place today, in the near future, BOKU believes a direct carrier billing transaction will be able to take place anywhere, whether it’s online, peer-to-peer, or at brick and mortar stores.



Of course, that data applies to the whole of mobile commerce (any purchase made using a mobile device), but what about direct carrier billing? The MEF data shows that mobile operator billing is, in fact, the most commonly used way of paying for purchases, with roughly 39% of respondents using this method. This compares with just 21% who prefer using credit cards and 20% who use an online payment service.

A factor that likely plays heavily into this result is their finding that a substantial portion of respondents don’t have access to banking services. The chart below shows respondents from each participating country that fall into this category.

The study further drills down on the data country by country.  Interestingly, out of 9 countries surveyed, only Singapore used a credit card more than mobile payments which is attributable to a credit card payment domination in that local market.

Alternatively, South Africa showed the greatest use of billing directly to the mobile phone bill as compared to other forms of payment.  Even in the United States, one of the most highly carded markets, billing directly to your carrier bill was the dominant method of payment in this survey.

To sum up, what have we learned?

1. By and large, consumers are engaging in mobile commerce and purchasing goods through mobile payments.

2. In 8 of the 9 countries surveyed, including both developed and developing countries, mobile operator billing is the dominant method of mobile payment.

3. Empirical data shows that mobile payments continue to be the payment method of choice and BOKU is well positioned to capitalize on this trend.

With connections across 240+ carriers in 66 countries, BOKU is proud to be leading the charge on delivering bank-grade mobile payment solutions via operator billing. We are uniquely positioned to offer merchant partners single-point integration to an extensive mobile payments network and the opportunity to participate in mobile commerce on a global scale.

* Source: MEF Global Consumer Survey 2011.  Base = 8,530 respondents across 9 countries who have participated in mobile commerce.

According to the article: ”The companies on our AMPC list hail from 22 industries, with software-and-services taking the biggest slice (35%). Some fast facts: 90 have raised outside capital; 70 have a CEO who is also one of the founders; 12 have one younger than 35 years old; 7 have yet to generate revenue; and one sells a burger topped with pastrami.”

Forbes has an innovative way of ranking promising companies using variables in their equation that take a comprehensive approach to evaluate a business’ health…or potential.  To help in their search, Forbes teamed up with CB Insights, a New York City-based data firm that tracks investment in high-growth private companies.  Forbes then combined CB Insights’ data with their own internal data gathered from the companies to come up with a list of companies with big growth potential.

Through its software, Mosaic, CB Insights mined data from 30,000 sources (press releases, social networks, job boards and court filings) to come up with a score for each company’s potential.  Then voila, rankings.  Other incredible and interesting companies to make the list include:  SecondMarket, Box and Evernote.

Many thanks for everyone at Forbes for selecting us, our investors for helping us realize our potential and the BOKU team for making our vision a reality.

When paying for mobile content, 40% of survey respondents claimed an interest in paying via operator billing.   That’s compared to 20% of respondents who voiced an interest in paying with a traditional credit card.  That translates into twice as many people preferring the operator billing option to traditional credit cards.

The market research report went on to say that consumers prefer to pay for mobile content outright versus paying a monthly fee for access.   The partiality for purchasing content was high across all age groups in both the United States and Western Europe and across users of all types of devices (Apple, Android, RIM, etc).

So what have we learned?

1 . Consumers are twice as interested in operator billing as using traditional credit/debit cards.

2. Consumers prefer to pay outright for content rather than pay monthly fees.

3. BOKU is uniquely positioned to give consumers the payment option they prefer.

The data shows that mobile payments are poised to gain even greater traction amongst Western European and US consumers, which means more transactions and higher revenue for BOKU and our partners.

With connections across 240+ carriers in 66 counties, merchants around the world can increase conversion rates and drive increased revenue.   We have the infrastructure and now you have the data.  Consumers prefer carrier billing.   Let us know how we can help get you started.

* In August 2010 Strategy Analytics surveyed 1500 wireless device owners in Western Europe, and a 1000 in the US via web survey.